Correlation Between Stifel Financial and Western Union
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Western Union at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Stifel Financial and Western Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Western Union Co, you can compare the effects of market volatilities on Stifel Financial and Western Union and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Stifel Financial with a short position of Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Western Union.
Diversification Opportunities for Stifel Financial and Western Union
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stifel and Western is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union and Stifel Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Stifel Financial are associated (or correlated) with Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of Stifel Financial i.e., Stifel Financial and Western Union go up and down completely randomly.
Pair Corralation between Stifel Financial and Western Union
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 2.48 times more return on investment than Western Union. However, Stifel Financial is 2.48 times more volatile than Western Union Co. It trades about 0.18 of its potential returns per unit of risk. Western Union Co is currently generating about -0.26 per unit of risk. If you would invest 10,051 in Stifel Financial on August 23, 2024 and sell it today you would earn a total of 1,293 from holding Stifel Financial or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stifel Financial vs. Western Union Co
Performance |
| Timeline |
| Stifel Financial |
| Western Union |
Stifel Financial and Western Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Western Union
The main advantage of trading using opposite Stifel Financial and Western Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Western Union can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Western Union will offset losses from the drop in Western Union's long position.| Stifel Financial vs. Evercore Partners | Stifel Financial vs. SCOR PK | Stifel Financial vs. Aquagold International | Stifel Financial vs. Small Cap Core |
| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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